Summit: Summit makes diverse allies to reform economy

By Cassandra Goldie

07 Sep 2015 — 12:00 AM

A wise woman once told me, 'Never assume where you will find your allies.' It was sound advice that has stood the test of time. For the Australian Council of Social Service, the National Reform Summit was just such a case in point. For weeks, representatives of business, the ACTU, and the community sector, young people, and older people, worked hard, behind the scenes, to find our common ground and we succeeded.

We all knew that, as we transition from boom-time to less certain times, our nation appears to have lost its way. We are one of the wealthiest countries in the world. Most of us enjoy living standards better than we have ever seen. Yet, in the face of intense global competition and uncertainty, our economy is slowing, unemployment is on the rise, basic protections are at risk, too many people live in poverty, and housing is less affordable than ever.

The summit demonstrated first that business, unions and civil society all recognise the seriousness of these challenges; and second, that there is a genuine basis for agreement across the community on the path ahead. The key to this consensus was our recognition that equity – fairness – does not have to be sacrificed to achieve economic growth, nor does growth have to be given up to achieve fairness. Our consensus was that economic growth is dependent upon a commitment to equity, as the IMF and the OECD have now been telling us for some time.

National Reform Summit. Different groups got together to discuss reform. Louie Douvis

We agreed that budget repair needs to focus on both revenue and expenditure, with intensive design work done now, to get us ready to begin serious transition within two years. We should act immediately on reforms clearly consistent with our approach. Our aim is to deliver structural balance within 10 years.

We agreed that on expenditure reform, we should focus our efforts on the fastest-growing areas of expenditure, particularly health and the retirement incomes system. This would avoid scattergun approaches to budget repair like we saw in the 2014 budget, which focused on programs that were not projected to grow strongly in the first place. Both these areas require serious redesign, using the best evidence and expertise to transform their effectiveness and economic efficiency.

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We agreed that on the revenue side, our focus should be on winding back tax concessions that are no longer fit for purpose. In our view this is the only realistic approach – this is where governments should now go in ending the "age of entitlement".

Superannuation tax breaks reform consensus

Our persistent call for focus on the retirement incomes system is right, with both serious revenue and expenditure implications. Despite the fact that the federal government has seemingly ruled out any changes, there was consensus on the need for reform of superannuation tax breaks. It was acknowledged that the current retirement incomes system isn't working for everyone, especially for women, people with interrupted careers, and low-income earners.

We agreed that we must strengthen our economy, lifting productivity growth and workforce participation. It was pleasing to see the summit groups agree to work together and with governments to improve opportunities for people who are locked out of the labour market, and to work intensively on reforms to lift productivity through innovations, skills, and infrastructure investment, not by driving down wages and conditions.

There was clear recognition that it is in the interests of both enterprises and communities to open up the ways to attract the additional workers needed to grow the economy as our population ages, and to provide the right policy settings to foster and support the enterprises of the future.

Crucially, the summit recognised the risks and opportunities of climate change. The longer we delay Australia's adjustment to energy-efficient industries and jobs, the tougher that adjustment will be for everyone.

Some critics will be disappointed the summit didn't strike any "grand bargain". This is a lazy view. Real gains require commitment and sustained effort. Isn't that what we tell our children?

The summit was an important next step towards effective reform, and an event imbued with genuine goodwill. It built on our past collaborations, extended them further, and – we hope – provided the wider community with a sense of hope and optimism for future effort – an antidote to the division and short-termism that plagues Australian politics at the present time. We understand that our politicians are elected to decide how governments respond to these challenges, but they cannot be resolved by governments alone.

Dr Cassandra Goldie is chief executive officer of the Australian Council of Social Service.